Third Quarter 2018 Outlook: The Tug-of-War Continues

Looking toward the second half of 2018, the struggle between opposing forces—the positive impact of late-cycle economics and negative forces connected to monetary policy and geopolitics—is ongoing and will continue for the near-term. Whether the positive impact of economic growth is likely to exceed the negative impact of rising interest rates and geopolitical uncertainty is the major question facing investors. The dispersion of asset class returns in the second quarter 2018 reflects the degree to which factors on either side of the tug-of-war are impacting individual investment strategies differently.